Michigan Charges Ahead: Groundbreaking Bill Paves Way for State Crypto Reserve

Michigan lawmakers just dropped a legislative bombshell that could reshape state treasury management—and put Wall Street on notice.

The Crypto Reserve Play

Fresh legislation aims to allocate a portion of Michigan's treasury into digital assets. No more waiting for federal green lights—states are taking financial sovereignty into their own hands.

Why It Matters

This isn't just diversification—it's a direct challenge to traditional finance models. While bankers debate yield curves, Michigan's looking at blockchain yield farms. The move signals growing institutional confidence in crypto's role as a legitimate reserve asset—despite what skeptics in pinstriped suits might mutter over their martinis.

The Bottom Line

Watch how other states respond. When one domino falls, others tend to follow—especially when there's potential revenue at stake. Because nothing motivates politicians faster than the chance to say 'we told you so' to neighboring states while quietly counting digital profits.

Michigan Bill Allows Up To 10% Investment

The measure would let the state treasurer place up to 10% of certain state funds into qualifying digital currencies. The funds named include the countercyclical budget and the economic stabilization fund.

The bill does not list a single currency by name; rather it sets rules that a digital asset must meet to qualify. Those who back the bill say this gives the state a new tool to diversify holdings and hedge inflation risks.

NEW: Michigan Strategic Bitcoin Reserve bill has progressed for the first time since February.

HB 4087 been placed on the House second reading calendar, and referred to the Committee on Govt. Operations.

The bill would allow 10% of state funds to be invested. pic.twitter.com/vN7Irm7Fr3

— bitcoin Laws (@Bitcoin_Laws) September 18, 2025

Security And Custody Rules

The text would impose strict custody and security standards before any purchase is made. Reports have disclosed requirements such as exclusive government control of private keys, the use of state-regulated or bank custodians, and the option to invest through registered investment companies or exchange-traded products.

The bill also calls for technical safeguards: end-to-end encryption, no access via smartphones, geographically split secure data centers, multiparty sign-offs for transactions, and regular security audits.

Supporters argue the rules reduce the main risks. They say a careful, limited position could protect the state from dollar weakness while offering upside.

Lawmakers who introduced the bill — Representatives Bryan Posthumus and RON Robinson — first filed it in February 2025, and its movement after roughly seven months of little action surprised some observers. Proponents also note that a few other US states have considered or passed similar measures.

Not everyone is sold. The Michigan Bitcoin Trade Council has argued the bill fails to set a market-cap floor, which could allow the state to buy smaller, less liquid tokens that swing wildly in price.

Critics worry that even with custody rules, crypto’s sharp ups and downs could leave public dollars exposed. Implementation questions remain too: who will manage key recovery, how audits will be handled, and how losses would be covered in a severe market drop.

Reports say the bill now sits with the Committee on Government Operations and could face close scrutiny in committee hearings.

If passed, Michigan would join a small group of states that have moved to let public treasurers hold crypto.

Featured image from Unsplash, chart from TradingView